For this assignment, you are engaged in the audit of Simon Corp, a new client. You are auditing the equity accounts for its first fiscal year ended, Dec 31, 2021. Click here for Assignment Data Assignment Answer Template - download this file to your computer. The template contains the a journal and the Stockholders' Equity section of a Balance Sheet. To complete the assignment, you will review the equity entries made by Simon and propose any necessary AJES (there will be 2 of them). After you record the PAJEs, consider the effect on the accounts and the revised balances. Update the T-Accounts for the adjustments and then complete the Stockholders' Equity portion of the Balance Sheet. When completed, save your file in the following format, Lastname_Equity and upload it to this link. A few hints as you analyze the Equity activity for this client - you will find 2 transactions that require a Proposed Adjusting Journal Entry (PAJE's) The Directors' minutes will show authorization for the activity in the various capital accounts (issuing stock and repurchasing stock). Hint- these entries are recorded properly. Simon declared a 10% stock dividend - consider the treatment of stock dividends - Is this a small stock dividend or large stock dividend? Was it recorded properly? (PAJE #1) Simon incurred stock issuance costs - consider how Simon recorded these costs - did they record them properly? (PAJE #2 - costs should have been a reduction of Additional Paid-in capital) A comment about PAJE's. You must be able to analyze "what should have been recorded" vs. "what the client recorded". The difference is the PAJE. This is what I am asking you to determine. In your template, I have provided the equity journal entries that Simon recorded. You will see that I have noted the 2 entries that were not recorded properly and will need a Proposed Adjustment. Stockholders' Equity Analysis and Proposed AJES You are engaged in the audit of Simon Corp., a new client, at the close of its first fiscal year, December 31, 2021. The accounts had been closed before the time you began your year-end fieldwork. You review the following stockholders' equity accounts in the ledger: Common Stock 1/3/2021 CRJ-1 10,000 11/27/2021 J12-10 1,000 Additional Paid-In-Capital 1/3/2021 CRJ-1 10/2/2021 CRJ-15 770,000 3,000 Retained Earnings 1,000 12/31/2021 11/27/2021 J12-10 J12-14 600,000 Treasury Stock 80,000 10/2/2021 6/13/2021 CDJ-5 CRJ-15 48,000 Income Summary 12/31/2021 J12-13 5,400,000 12/31/2021 J12-12 12/31/2021 J12-14 600,000 6,000,000 Other information in your working papers includes the following: a. Simon's articles of incorporation filed November 17, 2020, authorized 100,000 shares of $1 par value capital stock. b. Directors' minutes include the following resolutions: 1/3/21 Authorized issue of 10,000 shares to an underwriting syndicate for $78 per share. 6/12/21 Authorized acquisition of 1,000 shares from a dissident holder at $80 per share. 10/1/21 Authorized reissue of 600 treasury shares at $85 per share. 11/27/21 Declared 10% stock dividend, payable Dec 20, 2021 to stockholders of record Dec 5, 2021 c. The following costs of the Jan 3, 2021 and Oct 1, 2021, stock issuances were charged to the following expense accounts: Professional and Legal Fees $32,000 Printing Expenses $ 1,750 d. Market values for Simon Corp capital stock on various dates were: 6/12/21 $78.50 10/1/21 $85.00 9/14/21 $79.00 11/27/21 $90.00 1. Using the information provided on the Assignment Instruction file, record the PAJE's in the Journal below. Hint, you will have 2 PAJE'S. 2. Afer you record your PAJE's, determine the revised amounts in the equity accounts. Hint, use your T-Accounts to analyze! Proposed Adjusting Journal Entries Account Debit Date Credit Using these new amounts, prepare a partial balance a sheet SE section only) below Balance Sheet (SE section only) December 31, 2021 , Stockholders equity: Common Stock, 100,000 shs authorized, Paid-in capital in excess of par value Total paid-in capital Retained earnings Less: Treasury Stock : Total stockholders' equity For reference - Capital Account entries recorded by Simon Activity from T-Accounts) Date Account Debit Credit 1/372021 Professional and Legal Fees 32.000 Printing expenses 1.750 Entry not recorded correctly. Cash 33.750 Propose AJE Record stock issuance costs In this column, enter the number of shares for the common stock line and the treasury stock line In this column enter the amounts in this column. This is after the PAJE's you recorded 780.000 1/3/2021 Cash Common Stock Additional PIC lesuance of common stock 10,000 she @578 10.000 770,000 Common stock line should have # of shs issued and # of shs outstanding. 80,000 6/13/2021 Treasury Stock Cash Purchase 1.000 shs of stock @$80 80.000 51.000 10/2/2021 Cash Treasury Stock Additional PIC Reissue 600 shs of stock 995 48.000 3,000 1,000 11/27/2021 Retained Earnings Common Stock Record 10% stock dividend 1,000 Entry not recorded correctly Propose AJE For this assignment, you are engaged in the audit of Simon Corp, a new client. You are auditing the equity accounts for its first fiscal year ended, Dec 31, 2021. Click here for Assignment Data Assignment Answer Template - download this file to your computer. The template contains the a journal and the Stockholders' Equity section of a Balance Sheet. To complete the assignment, you will review the equity entries made by Simon and propose any necessary AJES (there will be 2 of them). After you record the PAJEs, consider the effect on the accounts and the revised balances. Update the T-Accounts for the adjustments and then complete the Stockholders' Equity portion of the Balance Sheet. When completed, save your file in the following format, Lastname_Equity and upload it to this link. A few hints as you analyze the Equity activity for this client - you will find 2 transactions that require a Proposed Adjusting Journal Entry (PAJE's) The Directors' minutes will show authorization for the activity in the various capital accounts (issuing stock and repurchasing stock). Hint- these entries are recorded properly. Simon declared a 10% stock dividend - consider the treatment of stock dividends - Is this a small stock dividend or large stock dividend? Was it recorded properly? (PAJE #1) Simon incurred stock issuance costs - consider how Simon recorded these costs - did they record them properly? (PAJE #2 - costs should have been a reduction of Additional Paid-in capital) A comment about PAJE's. You must be able to analyze "what should have been recorded" vs. "what the client recorded". The difference is the PAJE. This is what I am asking you to determine. In your template, I have provided the equity journal entries that Simon recorded. You will see that I have noted the 2 entries that were not recorded properly and will need a Proposed Adjustment. Stockholders' Equity Analysis and Proposed AJES You are engaged in the audit of Simon Corp., a new client, at the close of its first fiscal year, December 31, 2021. The accounts had been closed before the time you began your year-end fieldwork. You review the following stockholders' equity accounts in the ledger: Common Stock 1/3/2021 CRJ-1 10,000 11/27/2021 J12-10 1,000 Additional Paid-In-Capital 1/3/2021 CRJ-1 10/2/2021 CRJ-15 770,000 3,000 Retained Earnings 1,000 12/31/2021 11/27/2021 J12-10 J12-14 600,000 Treasury Stock 80,000 10/2/2021 6/13/2021 CDJ-5 CRJ-15 48,000 Income Summary 12/31/2021 J12-13 5,400,000 12/31/2021 J12-12 12/31/2021 J12-14 600,000 6,000,000 Other information in your working papers includes the following: a. Simon's articles of incorporation filed November 17, 2020, authorized 100,000 shares of $1 par value capital stock. b. Directors' minutes include the following resolutions: 1/3/21 Authorized issue of 10,000 shares to an underwriting syndicate for $78 per share. 6/12/21 Authorized acquisition of 1,000 shares from a dissident holder at $80 per share. 10/1/21 Authorized reissue of 600 treasury shares at $85 per share. 11/27/21 Declared 10% stock dividend, payable Dec 20, 2021 to stockholders of record Dec 5, 2021 c. The following costs of the Jan 3, 2021 and Oct 1, 2021, stock issuances were charged to the following expense accounts: Professional and Legal Fees $32,000 Printing Expenses $ 1,750 d. Market values for Simon Corp capital stock on various dates were: 6/12/21 $78.50 10/1/21 $85.00 9/14/21 $79.00 11/27/21 $90.00 1. Using the information provided on the Assignment Instruction file, record the PAJE's in the Journal below. Hint, you will have 2 PAJE'S. 2. Afer you record your PAJE's, determine the revised amounts in the equity accounts. Hint, use your T-Accounts to analyze! Proposed Adjusting Journal Entries Account Debit Date Credit Using these new amounts, prepare a partial balance a sheet SE section only) below Balance Sheet (SE section only) December 31, 2021 , Stockholders equity: Common Stock, 100,000 shs authorized, Paid-in capital in excess of par value Total paid-in capital Retained earnings Less: Treasury Stock : Total stockholders' equity For reference - Capital Account entries recorded by Simon Activity from T-Accounts) Date Account Debit Credit 1/372021 Professional and Legal Fees 32.000 Printing expenses 1.750 Entry not recorded correctly. Cash 33.750 Propose AJE Record stock issuance costs In this column, enter the number of shares for the common stock line and the treasury stock line In this column enter the amounts in this column. This is after the PAJE's you recorded 780.000 1/3/2021 Cash Common Stock Additional PIC lesuance of common stock 10,000 she @578 10.000 770,000 Common stock line should have # of shs issued and # of shs outstanding. 80,000 6/13/2021 Treasury Stock Cash Purchase 1.000 shs of stock @$80 80.000 51.000 10/2/2021 Cash Treasury Stock Additional PIC Reissue 600 shs of stock 995 48.000 3,000 1,000 11/27/2021 Retained Earnings Common Stock Record 10% stock dividend 1,000 Entry not recorded correctly Propose AJE